By Patrick Corby
Ireland is on the path to recovery with continuing growth in mergers and acquisitions (M&A) in spite of growing concerns that the wider Eurozone is falling back into recession, says the annual M&A report by law firm William Fry.
Ireland’s M&A market performed steadily last year despite its participation in the unified trade area. The report highlights that 2012 marked the third consecutive year that Irish firms looked to increase their production and business operations.
The report found that M&As in 2012 representing 82 deals were valued at €17.1bn, culminating in an 18% increase from 2011 which had 85 deals valued at €14.5bn.
The data mirrors increasing business confidence in long-term outlook and prospects within Ireland.Those deals that remained inside Ireland’s boarders were sealed by companies looking to increase their international market shares, such as Ireland’s Smuftkit Kappa Group Plc, the leading international packaging company.
There were also those such as the Eaton Corporation Plc, the components business, which acquired Copper Industries for €9.3bn in Ireland’s biggest purchase in 2012.
The majority of Ireland’s domestic M&A activity in 2012 stemmed from the financial sector as firms mop up those that failed in and post 2007.
Participation also came from the industrial chemicals sector. In 2013 this is set to change as infrastructure and technology are predicted to rise, given the ongoing investments in these sectors.
The report by William Fry highlights these developments as proof of Ireland’s ability to compete at a global level and sure signs of its recovery. William Fry also suggests that the economic recovery in Ireland provides the setting for private sale of public assets, such as the state owned gas company Bord Gáis Energy which would further Ireland’s growth.
Bryan Bourke, head of M&A at William Fry, expressed his confidence in Ireland’s recovery: “The M&A market in Ireland appears to be on the path to recovery and, albeit against a backdrop of continued global economic uncertainties, there is cause to be hopeful of good performance in 2013 across a variety of sectors, particularly technology, pharmaceutical, medical and biotechnology.”
For every three M&A deals in Ireland in 2012, two were contracted overseas. Among these are two of the biggest deals last year: the $7.3bn sale of RBS’s aviation finance business to Japanese firm Sumitomo Mitsui Financial Group, and the €449m acquisition of the hedge fund arm of Goldman Sachs by State Street and Trust Company.
“Overseas buyers are not only focused on distress-driven opportunities. With its improved competitiveness, Ireland’s future within the euro is more certain than it was a year or two ago,” was William Fry’s encouraging appraisal of the the Irish struggle to repair it’s economy.
I also write for The Upcoming, which you can read here.